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MOCVD market leaders to retain dominance, analyst says

Posted: 14 Apr 2014     Print Version  Bookmark and Share

Keywords:Yole Developpement  MOCVD  LED TV  reactor market  Veeco 

According to the latest forecast from Yole Developpement, in spite of the strong growth of the LED TV market in 2010 and an increase in MOCVD industry competition, the top three MOCVD reactor companies will continue their lead for a long time.

"Since 2010, more than 20 players (mostly from Asia) have tried to enter the MOCVD reactor market but without real success: in 2013, these new suppliers represented only three per cent of market share (only +2 per cent compared to 2010)," explained Pars Mukish, Yole Developpement.

Yole stated that the two main reasons for the lack of success has been that new entrants have missed the first two LED growth cycles (small display and large display applications) that have allowed leaders to build their expertise and know-how as well as their networks (sales office, training centre, etc.). Even big names, such as Applied Materials, did not achieve access to these markets. In addition, Yole estimated that the revenue collected during the 2010-2011 investment cycle (a total of more than $2 billion for MOCVD reactors, with >90 per cent going to Aixtron and Veeco) have allowed Veeco and Aixtron to slash ASP and initiate a price war to stall further market entry barriers.

Yole added that the current LED front-end industry is driven by cost reduction (as technological evolutions are reaching their saturation point). The main strategy developed by a new MOCVD reactor supplier is to focus on decreasing cost of ownership through a new heating system, new gas flow design and increased automation. However, even if this is the best and only strategy to adopt, the market analyst does not expect new entrants to have a big increase in future market share as the finances and expertise of the Big Two far surpass any of their competitors.

LED MOCVD reactor supplier market share

In the short term, Yole predicted that only two types of suppliers (outside of the Big Three) will survive:

Suppliers that develop collaboration with some big LED manufacturers, and Chinese suppliers that are able to scrape together bits and pieces of the huge local market.

- Paul Buckley
  EE Times Europe

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